The World Bank released a Country Private Sector Diagnostic report that outlines structural barriers holding back private investment in Kenya.

High electricity tariffs are a top concern, with firms paying roughly KSh 33.80 (US$0.26) per kilowatt‑hour and 75 % reporting frequent power outages.

Insufficient water supply adds to operational challenges, cited by more than 37 % of firms in the 2025 World Bank Enterprise Survey, well above the 17.2 % average for lower‑middle‑income countries.

Governance weaknesses deter investors; Kenya ranks in the bottom third of the Transparency International Index and one in three firms report requests for bribes.

Regulatory complexity raises costs, with overlapping national and county tax levies, frequent policy changes and inconsistent enforcement; 25.3 % of firms see licensing and permits as a major constraint.

Access to affordable capital has narrowed, as credit to the private sector fell from 36.7 % to 29.1 % of GDP between 2015 and 2024, leaving a financing gap of over KSh 2.5 trillion (US$19 bn) for micro, small and medium enterprises.

Insecure land tenure and outdated land records discourage investment in agriculture, tourism and real estate, where clear property rights are essential for financing and dispute mitigation.

Despite these constraints, the report notes Kenya’s competitive advantages – a diversified economy, skilled workforce and renewable‑energy assets – but warns that low private investment and lagging foreign direct investment limit growth.

The World Bank recommends a long‑term, economy‑wide reform agenda together with targeted actions in sectors such as coastal tourism, tropical fruits and medical consumables to unlock investment and support Kenya Vision 2030.